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MSE News: House prices up at fastest rate for three years
Comments
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HAMISH_MCTAVISH wrote: »What about it?
http://www.mirror.co.uk/money/city-news/wages-rise-squeeze-family-finances-2332633#ixzz2ggy0AR2B
So just to be clear, with falling unemployment, rising wages, an improving economy, and a BOE committed to only raising rates gently once the recovery is locked in......
Why do you think this will be a problem?
The banks are already stress testing applicants to ensure they can cope with higher rates when they issue mortgages.
It's simply not going to be an issue.
I think you are being rather naive there. The BOE will not say anything other than maintaining the status quo if they did it would cause the financial markets to react.
Why do I think it will be a problem? Because a rate rise would be worrying for me personally. And I am in a very good position. I have a much smaller mortgages than my friends who bought. In fact talking to one about this subject just a few weeks ago. He earns a similar amount to me but has a much bigger mortgage. He is currently on a 2 year fix and doesn't currently save anything. I asked him how he would cope when rates rise and he told me that it doesn't matter as he will just fix again if they do. He couldn't grasp the fact the if rates rise or banks think they may rise soon then fixed rates will be much more expensive...0 -
I think you are being rather naive there.
I think anyone that expects rates to shoot up to absurdly crippling levels, taking down both the housing market and the wider economy in the process, is being even more naive.
Not to mention also being economically illiterate.
Yes, rates will rise when the economy is recovering sufficiently, and rate rises are therefore required to dampen excess growth.
But a strengthening economy, falling unemployment, rising wages, etc, are exactly the backdrop against which rates should rise, and also the backdrop against which the vast majority of people won't struggle with them doing so.Why do I think it will be a problem? Because a rate rise would be worrying for me personally. And I am in a very good position.
Well, obviously you're not "in a very good position" if rates rising gently back to more normal levels over a period of many years worries you.
Like the vast majority of people benefiting from these low rates, I quite happily paid far more back in 2007, and could happily pay far more today if I had to.He couldn't grasp the fact the if rates rise or banks think they may rise soon then fixed rates will be much more expensive...
You can get a 25 year fixed rate today for under 5.5%.
If it worries you so much, why not look into it?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »The wider availability of credit is the great equaliser, that enables the common man to compete with the landlords and hoarders of capital to build assets for themselves instead of buying those assets for others.
Do you actually believe you have any clue about what you're saying? Just pretentiously spouting the same bizarre rhetoric that you do everywhere does not make you correct.
Availability of credit in no way whatsoever allows anybody to build any sort of assets. It does the complete opposite and builds debt, resulting in a downwards spiral into less and less affordability for these people.
While I generally agree with you (although I am currently a FTB, I didn't really struggle raising a deposit etc as I have a very well paid professional job, although I did do crazy overtime of 80 hour weeks sometimes. But I guess that's normal) that rising house prices are a good thing for the economy and the majority, that sort of nonsense just completely cheapens your point.
Just because purchase costs are going down regards to average income, does not mean we're all in some sort of bizarre financial utopia that you've dreamed up in your head. The cost of living is ever increasing against wages. Grocery costs, transport, services, etc are all increasing faster than the rate that wages are going up. I believe the official statistics only started around year 2000, but at the moment the average household has less spare money after all bills etc, than they have ever done since then.
I've seen people tell you hundreds of times, and I still see your hundreds of posts spouting the same tired rhetoric so I'm certain this post will have absolutely zero effect on you, but it comes across like you think your personal situation is how everybody in the world lives.
It is not.
So in short, yeah, it probably is good if they do go up (rather than this artificial media scare mongering that we have at the minute), but don't you dare pretend that its the greatest thing ever for all FTBs when it clearly is not.0 -
HAMISH_MCTAVISH wrote: »I think anyone that expects rates to shoot up to absurdly crippling levels, taking down both the housing market and the wider economy in the process, is being even more naive.
Not to mention also being economically illiterate.
Yes, rates will rise when the economy is recovering sufficiently, and rate rises are therefore required to dampen excess growth.
But a strengthening economy, falling unemployment, rising wages, etc, are exactly the backdrop against which rates should rise, and also the backdrop against which the vast majority of people won't struggle with them doing so.
Well, obviously you're not "in a very good position" if rates rising gently back to more normal levels over a period of many years worries you.
Like the vast majority of people benefiting from these low rates, I quite happily paid far more back in 2007, and could happily pay far more today if I had to.
You can get a 25 year fixed rate today for under 5.5%.
If it worries you so much, why not look into it?
That 25 year fix is already 2.5% above my current 5 year fix. That would add around £170 per month to my mortgage meaning no overpayments and probably halving the amount I save. Not an ideal situation. I also expect 5.5% would mean my friend would be very seriously struggling to pay the bills!
And I'm not talking "absurd" increases. Just a percentage or two.Well, obviously you're not "in a very good position" if rates rising gently back to more normal levels over a period of many years worries you.
Quite my point. People my age today are extending themselves to buy at low rates without considering or understanding the effect of small rises in rates. I am by far better off than any of my home owning peers!
Like the previous poster I also find your posts very strange you seem to dismiss the opinions of others and are constantly pushing the se agenda. So I think after this post I won't bother wasting anymore of my Saturday responding to you.
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What about when interest rates go up?
Well most people take out fixed-rate mortgages now, so increasing interest rates are of no consequence. I know someone who took out a 15 year fixed rate!
You also have to factor in that not just interest rates can and do go up, but inflation goes up too. So in 10 years time rents will be much more expensive than they are now, but your mortgage repayments will stay the same, and more than that, compared to inflation your mortgage repayments will be less as time goes on.0 -
Well most people take out fixed-rate mortgages now, so increasing interest rates are of no consequence. I know someone who took out a 15 year fixed rate!
You also have to factor in that not just interest rates can and do go up, but inflation goes up too. So in 10 years time rents will be much more expensive than they are now, but your mortgage repayments will stay the same, and more than that, compared to inflation your mortgage repayments will be less as time goes on.
Unless, of course - and this is entirely possible - interest rates have doubled, or worse, at the end of your fix. People seem to have forgotten all about the 10%+ rates that were the norm not that long ago.0 -
Well most people take out fixed-rate mortgages now, so increasing interest rates are of no consequence. I know someone who took out a 15 year fixed rate!
You also have to factor in that not just interest rates can and do go up, but inflation goes up too. So in 10 years time rents will be much more expensive than they are now, but your mortgage repayments will stay the same, and more than that, compared to inflation your mortgage repayments will be less as time goes on.
I wasn't comparing to renting. Just saying about the risks of rising rates. 15 year fix is great for 15 years but after the rates will almost certainly be higher. Most people fix for 5 years or less and the example I have earlier in the thread shows how many people don't comprehend what happens after it finishes.0 -
People seem to have forgotten all about the 10%+ rates that were the norm not that long ago.
Except of course, that they weren't really "the norm" at all.
In fact, periods of above 10% are rarer than periods of 3% or below, and the long term average is under 5%.
The three decades of the unusually high rates from the 60's to the 90's, are no more "the norm" than the unusually low rates we have now.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Unless, of course - and this is entirely possible - interest rates have doubled, or worse, at the end of your fix. People seem to have forgotten all about the 10%+ rates that were the norm not that long ago.
But if you're on a FIXED RATE mortgage, interest rates going up makes no difference to your repayments. That's precisely why people take out fixed rate mortgages.0 -
I wasn't comparing to renting. Just saying about the risks of rising rates. 15 year fix is great for 15 years but after the rates will almost certainly be higher. Most people fix for 5 years or less and the example I have earlier in the thread shows how many people don't comprehend what happens after it finishes.
You can fix for 25 years if you want. So interest rates do not affect your repayments.0
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